Some lenders are setting stricter requirements to qualify for a mortgage, including higher credit scores and larger down payments
Cigar-Hodge said that even lenders like Fannie Mae have raised their credit scores for certain types of loans. Not all lenders have increased their credit score requirements, though. If you're considering a lender that has increased its credit score requirements, you may still be able to find another lender that will accept your application with a lower score.
Cigar-Hodge recommended focusing on making other parts of your application impressive, such as your"Ideally, you would want your debt-to-income ratio to be at 30% or lower," she said. "The lower that can be, it helps balance out if you have a lower credit score or you're putting less than 20% down."than they asked for before the pandemic, up to 20%. However, Cigar-Hodge said higher down payment requirements aren't as common as mandatory high credit scores right now. If you talk to a lender that has raised its minimum down payment amount, then you can probably find another lender that will accept less.Because so many Americans are facing financial hardship during the pandemic, some lenders may require more proof than usual that you're financially secure. "Anyone looking to get a mortgage right now should just get all of their income and asset documents gathered, because underwriters are going to want more information than they usually would," Cigar-Hodge said. "So have at least two years of tax returns and W-2s." "I'm only speaking for Better.com," she said. "We only account for two years. Some other lenders may have longer periods of time they want to account for."With the influx of mortgage and refinancing applications, some lenders may take longer than usual to process your application. Application approval may go more quickly with online lenders that process your information digitally, though., may take longer than you'd expect. "At the beginning of the pandemic, there was more of an impact with appraisals delaying, because borrowers didn't want someone to come into their home," Cigar-Hodge said. "And a lot of businesses just closed completely, so we couldn't even get an appraiser out to them. But now that states are opening up, it's really state by state." Each state has its own guidelines about reopening during the pandemic, so depending on how strict your state is, you could face longer wait times during the closing process. If you're in a time crunch, factor delays into your timeline.
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